China woes hit iron ore

China woes hit iron ore - The West Australian

Today's start of Australia's biggest annual iron ore conference is set to be overshadowed by the price of the steel commodity entering a bear market that yesterday caused a $8.5 billion wipe- out for miners of WA's most important commodity.

BHP Billiton and Rio Tinto, which despite their global presence rely on Pilbara earnings, led the carnage on the Australian sharemarket, tumbling $1.56 to $36.16 and $3.74 to $61.20, respectively. They shed $6.6 billion of combined market value.

The headline loss was even more dramatic at Fortescue Metals Group, Australia's biggest pure-play iron ore miner and the Pilbara's third-biggest producer, which fell 51c, or almost 10 per cent, to $4.92. It wiped about $500 million off the wealth of Fortescue's chairman and 32.8 per cent shareholder, Andrew Forrest.

Although some analysts point to possible distortion in the export data because of the Chinese New Year holiday, they warned of a soft demand outlook heading into a possible iron ore oversupply.

The mood is backed by an iron ore spot price, for deliveries to Tianjin's port, that has fallen from about $US140 a tonne in early December to $US114.20/t last night, its lowest since June and officially in a bear market.

It is an inauspicious setting for the 17th annual Global Iron Ore and Steel Forecast, a two- day event which kicks off in Perth this morning and will feature analysts, economists and miners.